With the overexposure to information and content, it’s a wonder that we often shun the important stuff and get hooked only onto content that requires little mental engagement.
Isn’t it easier to watch one minute of an Instagram reel than to read a five-minute article on the subject of compounding? Isn’t it easier to scroll through Twitter feeds on the outcome of a tennis match than to watch the three-hour match itself?
It is definitely easier and less time consuming, but it is also not very nourishing. Two things happen, firstly, when you look for information in such short bursts, you are relying too heavily and blindly on trusting someone else’s opinion and not really the facts and reality. To go through facts and reality will require more time and more attention. Secondly, because you were able to go through this information so fast, you have already moved on to the next and the impact of what you just saw or read is diminishing from the very next minute.
If you can’t retain the knowledge and you are not entirely sure about accuracy, then are you really enhancing your knowledge and awareness?
In order to be more aware of what matters and about the aspects that you are unsure of, you have to be motivated to spend more time. You also have to find the right source, which requires doing a bit of your homework, which in turn requires more time.
Sounds like a daunting task, but this can be done. The reason you need to focus on awareness, especially when it comes to your money life, is because it impacts not just your present but also your future, emotional and physical well-being. Here are two things you can do in order to motivate yourself to be more aware.
1. Focus on impact
The question to ask is, what will you gain if you start being more aware. Do you know that 50% of the life insurance policies are surrendered before they complete the contracted period? This happens because most policies are bought without proper awareness of what they offer, on costs and on benefits. Many people buy expensive premium policies with low death benefits and realise this after 3-5 years of having paid the premium. Surrendering these policies or simply stopping premium payment is a loss. It could have been avoided by better awareness about what was being bought and why.
Think about money decisions you have made, which, if reversed or changed in any way could have resulted in a better or even just a positive outcome. Think about why you made those money decisions, which in hindsight don’t seem beneficial. Often the answer will be, because, you were told by a friend or a relative or a colleague that this was the thing to do. Friends, relatives and colleagues have now been effectively replaced by quick watch social media.
If you go on to social media, you will find all sorts of encouragement to put some money into cryptocurrencies. You will see that the last one year price change for the most popular cryptocurrency, Bitcoin, has been slightly over 330%. This is real and this is tempting and now it is encouraged and often talked about. It is thus, natural to want to invest yourself. However, rather than relying only on what is being shown, if you focus on impact, you are likely to seek more information. Don’t just look at the return, but also think about what impact will this have on your money, your wealth. Once you do that, you are likely to ask yourself the next question, what happens if the price falls. The next step then is to try and find out what kind of volatility there is in crypto asset prices. If you actively seek this information out, you will realise that crypto asset prices can fall 10%-20%-30% in a day. Are you ready to absorb that kind of volatility, without knowing when the tide will turn? How much of your wealth are you willing to risk on this?
Focus on impact and the awareness will follow.
2. Focus on goals
Often we look at money decisions in isolation. If I invest here, how much return will I make or is this a popular stock to be added to the portfolio, who else is buying it? However, money decisions rarely have isolated outcomes. If you have a bottomless pit of surplus money, then you can perhaps afford to make isolated money decisions. If not, then you need to think about what aspect of your life, your money decision will have a bearing on. Instead of doing this in the reverse ie. making the decision first and then thinking about the outcome, why not focus on the objective first and then decide on where to invest.
If your objective is saving and investing for retirement, the course of action and investment is likely to be entirely different from wanting to save and invest for international travel two years later.
When you set up your goals, you will not only seek out the right type of investment but also the right type of information about these investment options so as to minimise the risk of not achieving these outcomes. The outcomes are really the goal you seek to achieve and that makes it so much more important than an isolated investment decision. It also changes the perspective and forces you to ask the right questions which leads to better awareness.
Make the goal central to your decision making and awareness will follow.
A lot of the information we consume today is not about awareness, rather it is about a tick mark; I heard this, I saw that and I read this little bit. While this is okay if your purpose is just to kill time or entertain yourself in your free time. When it comes to money matters, being aware is underrated and being quick with your decision is overrated.